iPod Nano 7th gen. does support AAC (AIFF & WAV too).
Interestingly the iPod Nano 6th generation I think was the first device to support fast-forward and rewind via headphone remote. That's the main reason I don't use my 512GB iFlash iPod classic 2009 mod as often as I want to, although the support for m4b (m4a+aac) audio books is pretty good.
I've not tested ALAC on older iPods, which is a proprietary lossless format, but it might work on the newer more powerful ones (iPod touch)